Property

Capital Calls: Blackstone’s bright property sale

26 Jun 2023

Concise views on global finance: The investment firm led by Steve Schwarzman is selling a group of warehouses to Prologis for $3 bln, demonstrating that some parts of the troubled commercial real estate industry are holding up.

Flailing property firms make for risky buyout prey

13 Jun 2023

Shares in Swedish landlord SBB crashed, while listed European peers also trade at heavily discounted valuations. It looks like a golden opportunity for private funds, with $700 bln of cash. The tough part will be securing debt financing and avoiding catching a falling knife.

Center Parcs buyout would offer low thrills stay

17 May 2023

Brookfield plans to sell the British holiday park operator for up to 5 bln pounds. The company’s unique assets and brand loyalty have made it an appealing asset for private equity. But its own limits on expansion and Britain’s cost-of-living crisis may now dent returns.

Guy Hands’ misery offers bondholders a free lunch

16 May 2023

The Terra Firma owner lost a legal fight with the UK, which wants to end a controversial housing privatisation. That could force Hands to sell properties and repay 4 bln pounds of debt at a premium to its market price. It’s the kind of bet the former bond trader might have loved.

Blackstone is cautious enough with its mall IPO

4 May 2023

It has trimmed the size of a $400 mln REIT deal to list Indian shopping malls and pricing looks conservative. A successful float of a portfolio where occupancy rates are near maxed out will give the US fund something small to cheer about in a tough global real estate market.

Commercial property pain is only just beginning

13 Apr 2023

Valuations of offices and shopping malls are under threat as rising interest rates ratchet up the cost of buying real estate. In this Viewsroom podcast, Breakingviews columnists discuss how inflation and remote working could make the crisis far worse than 2008.

Swedish real estate is canary in the coal mine

13 Apr 2023

The Nordic nation is at the sharp end of Europe’s real estate slowdown. Residential prices fell 15% last year, with offices and shops set to follow as debt costs surge. Its property firms with borrowings equivalent to 40% of GDP have little cushion if foreign bondholders panic.

Zombified Evergrande will haunt for years to come

23 Mar 2023

The Chinese developer’s plan to restructure $20 bln of offshore debt proposes long repayment terms and sweeteners of dubious value. If approved, Evergrande still needs twice the amount in financing to finish building presold homes. The next problem is for onshore borrowers.

Capital Calls: Eli Lilly

1 Mar 2023

Concise views on global finance: The drugmaker is reducing the list price on its insulins by 70%. Problem is, few actually pay anything close to the sticker price. Insurers will probably prefer to use insulins from rivals, assuming they can keep negotiating big discounts.

Hong Kong’s office landlords face a tough rebound

1 Mar 2023

Global firms like Invesco are signing long leases but vacancy rates are at 12%, more than double Tokyo and Singapore. The Asian hub’s delayed reopening coincides with fresh supply hitting the market too. Hong Kong needs corporate tenants from mainland China to return fast.

Australia is shuffling towards mortgage crisis

15 Feb 2023

Commonwealth Bank is trading at a heady 2.4 times book as higher rates boosted its interest income by 20%. Peers are up too. But households have yet to fully feel the pain of higher payments and home prices are plunging. Risk buffers aren’t nearly as sturdy as investors think.

Public Storage has advantage in clutter battle

6 Feb 2023

The stuff-storing giant has kicked off an $11 bln takeover battle with an offer to buy smaller rival Life Storage. Based on today’s prices, the proposal leaves room for counterbids. But with storage companies looking historically expensive, Public’s stock gives it an advantage.

Leery buyers put screws to U.S. homebuilders

31 Jan 2023

Pulte, which constructs more upscale houses, lifted quarterly sale prices 17%, but D.R. Horton and Lennar sacrificed operating margin to offload homes. High interest rates are keeping 80% of Americans downcast about the market. Optimistic valuations tell an oddly different story.

Blackstone’s clever REIT deal punts big question

4 Jan 2023

A $4 bln investment in its real-estate fund shows Blackstone can pull in big-name money on good terms for itself. It doesn’t, though, prove the fund’s assets are worth what they claim to be. Steve Schwarzman’s firm has firepower aplenty, but hasn’t answered valuation qualms.

Singapore withstands a global property downturn

3 Jan 2023

The Lion City’s housing prices are up 14% in a year, compared to declines in Hong Kong and other major cities. A pandemic-induced construction shortfall and increasing foreign demand are factors. Rising interest rates will cool, but not halt, Singapore’s real estate boom.

China property gets $650 mln vote of no confidence

13 Dec 2022

Controlling shareholder Yang Huiyan is shedding 7% of Country Garden's services arm, a first. She doesn’t seem to need the money given state support for the developer, and it’s an odd time to sell. It suggests deep scepticism about Beijing’s real estate rescue package.

The implications of Blackstone’s property wobble

8 Dec 2022

The giant alternative asset manager’s market value dropped by $8 bln after it said investors were exiting its flagship real estate fund. In this Viewsroom podcast, Breakingviews columnists discuss the causes of the jitters and how rivals are vulnerable to similar moves.

Blackstone feeds private-market valuation fears

1 Dec 2022

The buyout shop is limiting redemptions from a $125 bln real estate fund after investors flooded it with requests, echoing a broader selloff in publicly traded peers. Limiting withdrawals risks a dangerous feedback loop. And a profitable Las Vegas deal offers limited reassurance.

Blackstone mall IPO puts wealthy India on display

1 Dec 2022

Brands like Zara suffer from a dearth of quality shopping centres like those the asset manager is floating. Its portfolio boasts high occupancy rates in both posh and up-and-coming locations. Owners collect rent plus a share of revenue. That’s compelling as the rich get richer.

Capital Calls: Funky debt shock

29 Nov 2022

Concise views on global finance: Germany property group Aroundtown won’t be the last to flout bond market convention on hybrid debt.